The pound’s momentum from last week has stalled, following media reports that Michel Barnier and Stephen Barclay were unlikely to make any headway in amendments to the Brexit deal which is currently on the table. Comments from the Labour party’s finance spokesman also struck a blow to the pound. With reports that few MPs from the labour party would back an unamended deal, investors took the opportunity to sell and take profits. Despite the fall the pound continues to trade around 1.1625 against the euro and 1.3142 against the US dollar.
Yesterday morning the pound was helped by the release of services PMI, coming in ahead of forecast. Although forecast to increase to 50.1, data released at 51.3, steering the economy away from stagnation. Across the eurozone a host of countries, including Germany, also had services PMI release ahead of forecast showing optimism in the sector.
Today, at 12.15 GMT, Bank of England deputy governor Cunliffe will be speaking at the London school of Economics, followed by MPC member Saunders at 5.30 GMT. Investors will be listening closely as there are often clues to the future of monetary policy. From the US, ADP non-farm employment change will be released at 1.15 GMT. The data provides an early look at employment growth, which gives an indication of consumer spending and overall economic activity.